Analyst Meet -20 Results Conference Call Nov...
Transcript of Analyst Meet -20 Results Conference Call Nov...
Analyst Meet
Q2’19-20 Results
Conference Call
15th Nov 20191
Disclaimer / Safe Harbor Statement
This presentation may contain statements which reflect Management’s current views and
estimates and could be construed as forward-looking statements. The future involves risks and
uncertainties that could cause actual results to differ materially from the current views being
expressed. Potential risks and uncertainties include factors such as general economic conditions,
commodities and currency fluctuations, competitive product and pricing pressures, industrial
relations and regulatory developments.
2
Q1 Q2 Q3 Q4 Q1 Q2
Growth% 14% 13% 11% 10% 6% 6%
24 month growth% 20% 21% 25% 24% 20% 19%
We Delivered growths outpacing the market…with
a healthy sequential shift of ~13%...
2,225
2,537 2,558 2,510 2,527
2,855 2,827 2,764 2,677
3,023
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Consolidated NSV as per published results
FY 17-18 (10%) FY 18-19 (12%)
3
FY 19-20 (6%)
High base Healthy 24
month growth
Rs C
rs.
Con
solidate
d N
SV
…And continued to strengthen our market leadership…
4
24.0
25.0
26.0
27.0
28.0
29.0
30.0
31.0
32.0
33.0
12-13 13-14 14-15 15-16 16-17 17-18 18-19 YTD 19-20
Bis
cu
it M
ark
et
Sh
are
%
Britannia Largest Competitor
As per AC Nielsen
…In a tough market environment
However, measures taken by Govt should help revive the economy
5
Slowing GDP growth
Stress in rural economy with reduced real income from Agri
Credit squeeze by Banks & NBFCs
Interest rate cuts & liquidity easing measures
Reduction in Corporate tax rate to spur investments
Increase in MSPs for certain crops
Package to boost exports
India macro economic scenario Measures taken by Government
Investment
Brand Equity
Innovation &
relaunches
New Category
Distribution
Technology & backend
Sustain-ability
In this challenging situation, we however….
continued our investments to drive profitable growth
6
#1 Investment in Brands
NC Healthy Start Activation
Win a Sports Cycle every hour
MBK TN Activation
Win an educational trip for your child
Treat Burst NC Cream Cracker
Relaunch
Key Brands on
air
Digital /
Activations
MBK in ROI
7
Treat Stars
Consumer Promotions
Goodday & Marie
#2 Innovation & Relaunches
Goodday RelaunchNutrichoice Arrowroot Relaunch
Nutrichoice Cream Cracker RelaunchNew Launches
Limited Edition launch Test launch - West
8
• Packaging change from Mat to Gloss
• Bold brand identity
• Recipe & design change
• Packaging change
• Recipe change – Sugar Free
• Packaging change
Q1'19-20 Q2'19-20
NSV Rs Crs.
Q3'18-19 Q4'18-19 Q1'19-20 Q2'19-20
NSV Rs Crs.
Wafers
• 10+% market share.
• No. 3 Brand.
Baked Salted Snacks
#3 New category launches…
Available in 3 formats in South :
• Groovy Chips
• Fun Sticks
• Crunchy fills
Plan to launch in West with commercialization of
Ranjangaon salted snacks facility.
9
Croissant
….New category launches
Milk Shakes – Tetra pack
2 Variants:
• Chocolate
• Vanilla
• Improved product sensorial to suite Indian palate.
• Wheat flour procurement issue resolved.
• Reduced factory wastage & increased efficiency.
• Focused launch in West Bengal & TN.
10
• 20+% market share.
• No. 2 in Brand in less than a year of launch.
#4 Distribution drive
11
7.3
10.0
12.6
15.5
18.4
21.0 21.3
Mar'14 Mar'15 Mar'16 Mar'17 Mar'18 Mar'19 Sep'19
Dec-1
6
Jan
-17
Feb-1
7
Mar-
17
Apr-
17
May-1
7
Ju
n-1
7
Ju
l-17
Au
g-1
7
Sep-1
7
Oct-
17
Nov-1
7
Dec-1
7
Jan
-18
Feb-1
8
Mar-
18
Apr-
18
May-1
8
Ju
n-1
8
Ju
l-18
Au
g-1
8
Sep-1
8
Oct-
18
Nov-1
8
Dec-1
8
Jan
-19
Feb-1
9
Mar-
19
Apr-
19
May-1
9
Ju
n-1
9
Ju
l-19
Au
g-1
9
Sep-1
9
Steady increase in Numeric Distribution
In L
akh
s
Sustaining Direct Reach
7k 8k10k
14k
18k20k
Mar'15 Mar'16 Mar'17 Mar'18 Mar'19 Sep'19
No o
f R
PD
s (R
ura
l Pre
ferr
ed D
eale
rs)
Sustaining Rural distribution
In %
11.0%
13.0%
15.0%
17.0%
19.0%
21.0%
UP MP Gujarat Rajasthan
2017-18 2018-19 YTD 19-20
Market share gains in Hindi belt
In %
Food Park
Biscuit
Cake including different-
iated
Croissant
Salted Snacks
#5 Hi-Tech food park at Ranjangaon - up and running
12 Lines planned with a capacity of
~ 140,000 TPA
Cake – Italy
Biscuit line – Italy
Biscuit line –USA
Salted Snacks –France
Technology investments for the future
Technology
Also a regional storage hub for Inventory 12
#6 Sustainability drive on plastic waste
13
• Awareness drive amongst employees by collection of ~ 2 MT of plastic waste across 6 locations
• Digital campaign to inspire every person to make a start on the waste segregation journey
Adjacent Business..
Bread: Focus continues to be on driving profitable growth
Dairy: Low single digit growth, however improved profitability sequentially
International: While Middle East & Africa continues to be challenging, America growing double digits. Nepal operations doing well coupled with steep market share gains.
14
On the Cost front…
15
12-13 13-14 14-15 15-16 16-17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20
Flour
12-13 13-14 14-15 15-16 16-17 Q1'18Q2 18Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20
Sugar
12-13 13-14 14-15 15-16 16-17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20
RPO
12-13 13-14 14-15 15-16 16-17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20
Milk
Overall commodity inflation is moderate @ ~3%, basis
strategic positions in key input material
Rs./kgRs./kg
Rs./kg Rs./Ltr
Q2 Inflation: 14% Q2 Inflation: 1%
Q2 Deflation : 13%Q2 Inflation: 37%
16
And our journey on reducing wastages,
leveraging fixed costs and driving cost
efficiencies is moving ahead with full steam,
which has resulted in…
17
Operating Profit%
295
344 366 355 354
417 409 390
350
447
Q
1
Q
2
Q
3
Q
4
Q
1
Q
2
Q
3
Q
4
Q
1
Q
2
13.1%
14.8%
13.3%13.6%
14.3% 14.1% 14.0%14.6% 14.5%
14.1%
Con
solidate
d O
pera
tin
g P
rofit
FY 17-18 (13.8%) FY 18-19 (14.3%)
18
Q1 Q2 Q3 Q4 Q1 Q2
Growth% 20% 21% 12% 10% -1% 7%
24 month growth% 23% 35% 44% 42% 19% 30%
FY 19-20 (14.0%)
Improved profitability by 170 bps sequentially
Rs C
rs.
Financials
19
Key Financial Lines – Consolidated (Reported) Rs. Crs.
Particulars (Consolidated) Q2’19-20 Growth %
Net Sales 3,023 6%
Profit Before Tax 498* 9%
Profit After Tax 404# 33%
Particulars
(Consolidated)12-13 13-14 14-15 15-16 16-17 17-18 18-19
19-20
Q1
19-20
Q2
Profit from
Operations%5.7% 8.0% 9.3% 13.2% 12.9% 13.8% 14.3% 13.1% 14.8%
Profit before Tax% 5.8% 8.3% 12.2% 14.7% 14.5% 15.4% 16.1% 14.6% 16.5%
Profit after Tax% 4.2% 5.8% 8.9% 9.9% 9.9% 10.2% 10.6% 9.4% 13.4%
Source: Company Financials – Consolidated Results
Note: Profit% have been restated for previous years (wherever required) to make the numbers comparable
20
* Factors interest on debentures issued @ Rs. 5 Cr per month starting Sep’19.
# Factors reduction in Corporate income tax rates on a year to date basis.